Gloves come off as government to dump cabbageThe government will release additional stockpiles of food and take other measures to help keep food prices from going up amid worldwide agflation, the Ministry of Strategy and Finance said yesterday.
Agflation, a portmanteau of agriculture and inflation, refers to a phenomenon where high food prices exert upward pressure on inflation. Fears of agflation are rising following a record heat wave that is expected to cut the harvest of major crops, while droughts in the United States are already pushing up corn prices globally.
The ministry said that to prevent a sudden rise of prices due to low supply, the government will release 3,500 tons of government-stock white cabbages before Chuseok, the traditional Korean harvest festival, that usually sees demand for food surge to the year’s high.
“Many farms with white cabbages ready to be shipped out are reporting undergrowth due to high temperatures,” the ministry said. “There will be enough supply throughout the middle 10 days of the month, but there are risks of insufficient supply toward the end of August.”
The average temperature in the first week of this month came to 28.1 degrees Celsius (82.5 Fahrenheit), 2.1 degrees Celsius higher than average, according to the ministry. A nationwide drought that lasted until the beginning of August is also expected to affect the size of this year’s harvest.
“The heat wave has been weakened by recent rains throughout the country, but its impact will likely continue for some time,” Finance Minister Bahk Jae-wan told an anti-inflation meeting.
Noting how the recent rise of food prices has also been caused by a price hike of processed food products, the minister said the government will intensify its penalties for companies that raise their prices through a variety of methods that apparently include price-rigging and reducing the volume of contents in packaged products.
Bahk said such penalties will include collecting undue profits from such practices.
“Now is the time [for companies] to act prudently and absorb their need to raise prices, as a rise in the price of processed food will further cut consumer spending, which in turn will lead to a cut in their sales,” he said.
The record heat has also inflicted severe damage on the country’s livestock, killing at least 1.8 million chickens and ducks at over 600 farms across the nation, the Ministry of Food, Agriculture, Forestry and Fisheries said earlier.
The Finance Ministry claimed this will have little to no impact on prices as the number of chickens killed only account for 1.1 percent of some 160 million being raised.
Still, the government said it will ask farms and related companies to release an additional 7,000 tons of chickens from their stockpiles if necessary.
Also, the government will release 25,000 tons of onions and 50,000 tons of pork that are imported at lowered tariff rates to further help stabilize prices, the Finance Ministry said.